How to Avoid Losing Money If Your Local Builder Goes Bust

With bankruptcies on the rise, upcoming figures are likely to show at least 100,000 new insolvencies, with many expected to be skilled tradesmen who work for themselves.

It can be very frustrating to deal with a trader who goes bankrupt in the middle of your job; having a half-finished basement is not the same as losing out on a retail purchase, it's a pain to attempt completing a work done by another contractor, and an even bigger pain trying to get your money back.

This means if you plan on renovating or having repair work done in the near future, take extra measures to protect yourself. Taking extra precautions to ensure that you are not defrauded or left with unfinished work will save lots of time, money, and stress in the long run.

Here are 4 tips from us to make sure your wallets stay safe:

1. The first and best way to protect yourself is to pay by credit card. If a service provider fails to deliver goods or services you have paid for, your rights under Section 75 of the Consumer Credit Act mean that your bank must help pursue the claim and compensate you for loss, as long as it is between £100 and £30,000.

2. As mentioned in our previous Section 75 article, if you pay a deposit that’s less than £100, but the total cost of the project or service is more than £100, you’re still covered. So if prefer not putting the whole sum on your CC, consider this as an option.

3. If the trader doesn’t take credit cards, you may want to consider getting another contractor. However, if you still choose to do business this way, pay as little as you can up-front, and schedule instalments that are commensurate to phases of completed work.

4. It is also possible to get insurance on building and window work. Warranty Services, one of many insurers, charges only £30 for insolvency protection against a roofer going bankrupt while carrying out repairs costing up to £5,000.